Plenary Session

Friday 29 June 2012, 14:00 - 15:00

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William D. Nordhaus, Yale University, USA

Chaired by Carolyn Fischer, Resources for the Future
Room VENCOVSKEHO AULA, video transmitted to RB 101

The special contribution of economics to the understanding and policy of climate change has been the development of integrated assessment models (IAMs). In this talk, I will sketch the development of IAMs. Integrated assessment models can be defined as approaches that integrate knowledge from two or more domains into a single framework. These are sometimes theoretical but are increasingly computerized dynamic models of varying levels of complexity. The talk will illustrate how IAMs approach climate change using the DICE/RICE family of models as an example. The discussion will then describe some of the open issues in IAMs: the social cost of carbon, complexity and transparency, the discount rate, uncertainty for thin-tailed distributions, higher-moment uncertainty ("fat tails"), catastrophic climate change, strategic considerations and the game-theoretic aspects of climate-change policy, and modeling technological change. It will conclude that there is much fruitful work for environmental economists working with other scientists to develop our understanding in these areas.
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